What do you need to cover in a construction contract?

When you enter into an agreement to perform construction work in Tennessee, you want to make sure you have a contract in place that protects both sides. Many people in your industry neglect to read contracts in their entirety. However, doing so has the potential to come back to bite you. A solid construction contract has specific areas it addresses, and reading through it in its entirety may help you avoid unnecessary and potentially costly legal trouble.

When reviewing a construction contract before signing it, know that the contract should cover these areas, among others.

The scope of work

A construction contract should be thorough when it comes to outlining the scope of work because this is an area where many people run into trouble. The contract should contain specifics about exactly what you, the contractor, plans to do. It should also stipulate that everyone involved in the project must adhere to building codes and project plans.

A termination clause

A termination clause is an important element of a construction contract because it gives you an out if certain things never come to fruition. This section outlines how you might go about terminating the relationship between you if it turns sour.

A dispute resolution clause

Because construction disputes are common, a solid construction contract should dictate how you plan to handle any disputes that arise while your project is ongoing. Mediation, arbitration and litigation are possible options.

While these are some important areas every construction contract should address, this is not an exhaustive list of all areas such a contract should cover.